Stanley Works

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IN THE MATTER OF THE STANLEY WORKS CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3876. Complaint, 'June 2, 1999--Decision, June 2, 1999 This consent order, among other things, prohibits The Stanley Works, a ,. Connecticut-based manufacturer and distributor of mechanics tools, from misrepresenting the extent to which any mechanics tool is made in the United 'States. Participants For the Commission: Kent Howerton, Laura Koss, and Elaine Kalish.

For the respondent: John Harkrider, Ax inn, Veltrop & Harkrider, New York, N.Y.

COMPLAINT The Federal Trade Commission, having reason to believe that The Stanley Works ("respondent") has violated the provisions of the ·Federal Trade Comniission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges: 1. Respondent The Stanley Works is a Connecticut corporation with its principal office or place of business at 1000 Stanley Drive, New Britain, Connecticut. ..·, 2. Respondent has manufactured, advertised, labeled, offered for sale, sold, and distributed products to the public, including mechanics tools.

3. The acts and practices of respondent alleged in this complaint have bee·n in or affecting commerce, as "commerce" is defined in I-I . Section 4 of the Federal Trade Commission Act. HUSKY MECHANICS TOOLS 4. Respondent has disseminated or has caused to be disseminated advertisements, catalogs, packaging, labeling, in-store displays, and other promotional materials for certain of its Husky combination wrenches and sockets, including but not necessarily limited to the attached Exhibits A through J. These advertisements, c~talogs, packaging, labeling, in-store displays, and other promotional matefials contain the following statements or depictions: Complaint 127 F.T.C. A. Television Advertisement, Exhibit A:

Shows mechanics at work using Husky combination wrenches and standard sockets. Voice-over states: "We told these mechanics that Husky tools were American made and guaranteed forever."

B. Print Advertisement, Exhibit B:

A photograph of a man holding a combination wrench while working on his car. The words "Made in U.S.A." appear on the combination wre.nch. C. Catalog, Exhibit C:

"The Husky name was first registered back in 1924 for use on quality US made Mechanics Tools .... Husky tools are made to exact standards in state of the art manufacturing plants in Dallas, Texas"; and A logo consisting of an American flag with the phrases "Made in U.S.A." and "Guaranteed Forever" ("U.S. flag logo").

D. Catalog, Exhibit D:

"American Made to Meet or Exceed ANSI Specifications"; and "Made in the USA."

E. Catalog, Exhibit E:

"Made in the USA"; and U.S. flag logo.

F. Catalog, Exhibit F:

U.S. flag logo.

G. Packaging and Labeling, Exhibit G:

"Made in U.S.A." in black and white; and U.S. flag logo. H. Packaging and Labeling, Exhibit H:

"Made in U.S.A." in red, white, and blue; and "Made in U.S.A." in black and white.

I. In-store Display, Exhibit 1:

"All Husky Tools Made in USA"; and U.S. flag logo. J. Product Registration Card, Exhibit J:

A depiction of a U.S. flag.

5. Respondent has distributed or has caused to be distributed certain of its Husky combination wrenches and sockets marked with the following statements: "U.S.A."; or "Made in U.S.A." PROTO MECHANICS TOOLS 6. Respondent has disseminated or has caused to be disseminated advertisements, catalogs, packaging, labeling, and other promotional materials for certain of its Proto combination wrenches and teardrop ratchets, including but not necessarily limited to Exhibits K through L, that contain the following statements or depictions: A. Catalog, Exhibit K:

Logo consisting of the words "Made in U.S.A.," appearing next to a silhouette of the continental United States that is covered by the U.S. flag. THE STAN LEY WORKS 80~ 807 Complaint B. Stanley Catalog, Exhibit L:

"Proto was the first hand tool manufacturer to produce and market the combination wrench in the United States"; and Photographs of combination wrenches marked "U.S.A." C. Packaging and labeling:

"Made in the U.S.A."

7. Respondent has distributed or has caused to be distributed certain of its Proto combination wrenches and teardrop ratchets marked with the following statements: "U.S.A."; or "Mfg. U.S.A." ' · BLACKHAWK MECHANICS TOOLS 8. Respondent has disseminated or has caused to be disseminated promotional materials for certain of its 'Blackhawk combination wrenches, open end wrenches, box end wrenches, flare nut wrenches, sockets, ratchets, flex handles, wrench sets, and socket sets that contain the following statements or depictions: t "America's Best"; !; Photographs of certain tools marked "U.S.A."; "Made in America"; or "American-Made." 9. Respondent has distributed or caused to be distributed certain It l of its Blackhawk combination w-renches, sockets, flex handles, box l ,. end wrenches, flare nut wrenches, and open end wrenches marked with the following statement: "U.S.A."

CHALLENGER ..MECHANICS TOOLS 10. Respondent has disseminated or has caused to be disseminated promotional materials for certain of its Challenger combination wrenches, sockets, combination wrench sets, box end .wrench sets, open end wrench sets, and cold chisel sets that contain the following statements or depictions:

Photographs of a combination wrench marked "U.S.A."; Photographs of sockets marked "Proto U.S.A."; Photographs of cold chisels marked "U.S.A."; or Photographs of combination wrench sets, box end wrench sets, an open end wrench ' set, and a cold chisel set in roll-up pouches that state "Made in U.S.A." ~ ~ I ~ 11. Respondent has distributed or caused to be distributed certain t of its Challenger sockets, combination wrenches, open end wrenches, ~ .r II ~:~"".l ....l: ----- - -·- Complaint 127 F.T.C. box end wrenches, flare nut wrenches, and cold chisels marked with the following statement: "U.S.A."

MASTER MECHANIC MECHANICS TOOLS 12. Respondent has disseminated or has caused to be disseminated certain of its Master Mechanic combination wrenches, sockets, and socket sets with labeling or other promotional materials that contain the following statement: "Made in U.S.A." 13. Respondent has disseminated or has caused to be disseminated certain of its Master Mechanic combination wrench sets and socket sets with packaging, labeling, or other promotional materials that contain the following statement and depiction: "Made in U.S.A." next to an American ~ag.

14. Respondent has distributed or caused to be distributed certain of its Master Mechanic combination wrenches, flex handles, and sockets marked with the following statement: "U.S.A." STAN LEY MECHANICS TOOLS 15. Respondent has distributed or caused to be distributed packaging, labeling, or other promotional materials for certain of its Stanley combination wrenches, box end wrenches, open end wrenches, ratchets, combination wrench sets, and socket sets that contain the following statements or depictions:

"Made in U.S.A."; "U.S.A.";

. I "Tools made in U.S.A. Case made in Taiwan."; A logo consisting of an eagle head on an American flag· and the words "Made in u.s.A.";

Photographs of combination wrench sets and an open end wrench set with "Made in U.S.A." on their packaging; or A silhouette of the United States showing Stanley plant locations. 16. Respondent has distributed or caused to be distributed certain of its Stanley combination wrenches, open end wrenches, and box end wrenches marked with the following statement: "U.S.A." CATERPILLAR MECHANICS TOOLS 17. Respondent has distributed or caused to be distributed certain combination wrenches and cold chisels that it manufactures for Caterpillar marked with the following statement: "U.S.A." THE STANLEY WORKS 811 807 Complaint JOHN DEERE MECHANICS TOOLS 18. Respondent has distributed or caused to be distributed certain I combination wrenches and sockets that it manufactures for John I l_, I, wiili t:::::::::::::e:~o~~ S A." I Deere marked1 i. ~ 19. Respondent has distributed or caused toi be distributed certain ' : ratchets, flex handles, and sockets that it manufactures for Martin marked with the following statement: "U.S.A." WILDE MECHANICS TOOLS 20. Respondent has distributed or caused to be distributed certain sockets that it manufactures for Wilde marked with the following statement: "U.S.A." I. . 21. Through the meahs described in paragraphs 4 through 20, respondent has represented, expressly or. by implication, that certain ~ I : i of its mechanics tools are made in the United States, i.e., that all, or virtually all, of the compon~nt parts of such mechanics tools are made :1,, ij 1' ';

in the United States, and that all, or virtually all, of the labor in manufacturing such mechanics tools is performed in the United States. ..,) 22. In truth and in fact, a significant portion of the components of certain of respondent's mechanics tools is, or has been, of foreign origin. Therefore, the representation set forth in paragraph 21 was, and is, false or misleading. ' ! I .. 23. The acts and practices of respondent as alleged in this complaint constitute .unfair or deceptive acts or practices in or '-; !1. ,' affecting commerce in violation of Section 5(a) of the Federal Trade : i. I.: i Commission Act. , j I HI EXHIBIT A Exhibit A consists of a video tape of a television advertisement. It has been placed on the public record of this proceeding. - ------------==--·--..__ ___ _ _____ _ 812 FEDERAL TRADE COMMISSION DECISIONS · Complaint 127 F.T.C. EXHIBIT B I Hank's Helpful Hints I I i I J 1. AJw:ays use ch~ best cool for the job.

1. The best isn't :always the most expensive.. ] . The best isn't :always the most well known. 4. Buy Hw;ky ;and torget the ocher rules.

EXHI BI'r B The cougnesc name in toots:

Cuar"2tUU:d for hfe. Jnd only .c 1"h~ Home Oe\'O'- --------- - ____.___ THE STAN LEY WORKS 813 807 Complaint EXHIBIT C ' ' • EXHIBIT C .I ·~- Complaint 127 F.T.C. EXHIBIT D ~· ~IECE SOCKET 254-PIECEMECHANICS " 1 · SET with SOFT SIDE CASE -!W1.611Jl ·--I'R:I'IC.114'1ndl1' ---hulooyl.-biU ondoaft-c:aoo ·---....,(41Wi?) ~ICS TOOL SET- (1114111 • • "34.AO 11 DRAWER COMBO 7 DRAWER COMBO HOMEOWNER TOOL HOMEOWNER TOO CHEST,CABINET CHESTICABINEY •o.-_noe_tn ·o.-- naclndudodt fi6nutiiOLD-prtoo fl46-prb HNRATELY: =.~: I ..U.WER CHEST 4 DIU.WIR CHEST f11111~ •a.oo f1}1)1 (f144M) ..... - ... · 6' s.DMWER caa.T ~WIRCAaiNET •I2SIO&.In._..., •1250 .... il. -"Y · ~lDpond- ... ._....,., ·~"'P--Ior--.gctl ·----.,_(117-«111) "101..00 ·----.,_ (117.f13) •• -- or. QCDT DIU.WIR Ulcer CAaiNET DRAWER OMDE IMitHY(IIT-4111) ' 7.44 ~(117-912) .. . .... . ...• I , ~ f44CJ1 •.~ 32" =-:: :· '"' "'OFESSIONAl TOOL BOX , JrWd 1fZ'~ 1/l"H • 241>&.

EXHIBIT D I,__ THE STANLEY WORKS 815 807 Complaint EXHIBIT E . i I I:I '------- -~ 816 FEDERAL. TRADE COMMISSION DECISIONS Complaint 127 F.T.C. EXIllBIT F 062·813 : HOOS IS rc. Full Polilh Comhn \\rench Set :. ·. ·. .. t. I ·. I .

9oK-10.1 · ~ 5.\0 .\ IS P.:. Full P<>lilh Ct~ml>" \ k :n, \\·r~n • h • s: o 10. II. 12. I ; 14 IS In. 1- . 1 ~. ! 0 ~I ~ : ~I \I r.vrt Yn1"~ F - THE STANLEY WORKS 817 807 Complaint EXHIBIT G I' EXHIBIT G (front ) \ I I ·' Complaint 127 F.T.C. EXHIBIT G EXHIBIT G (bac k ) THE STANLEY WORKS 819 ' .I 807 Complaint ' i~ :' EXHIBIT H ·, I '• I I .d...

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EXHIBIT H (front) Complaint 127 F.T.C. EXHIBIT H t(!t~ss~Y 6 PC. COMBINATION . WRENCH SET • Forged alloy steel for long life • Chrome plated to resist rust FULLLIFETIME WARRANTY Husky Professional Tools warrants th•s product against defects in material and workmanship and if defective will replace it free of charge. Simply return it to any HOME DEPOT or to Husky Professional Tools. 1304 Champion . Circle, Carrollton, Texas 75006.

This warranty excludes incidentaVconsequential damages which exclusion is not allowed in some states and may noc apply lo you. This warranty gives you specific legal rights and possibly others which vary from state to state. WORK SAFELY WITH TOOLS BY .\ WRENCHESWEARINGSHOULDSAFETYNEVERGOGGLESBE USED AS i A HAMMER OR STRUCK WITH A HAMMER WHENEVER POSSIBLE PUSH, DON'T PULL ON A WRENCH HANDLE EXHIBIT H (back) MADE IN U.S.A.

~,..,1'\.1992,.....,.Husky__ _ - Professional. ...... . - Tools.. THE STANLEY WORKS 821 1807 Complaint ! EXHIBIT I II I l I I I I I !I -I I .

•i ".. / .. :I Ij ''I il I ' I • Complaint 127 F.T.C. EXHIBIT J Pl~ase complete and return this information card. f!pon receipt. you will be entered itt our QUARTERLY. PRIZE. DRAWING! Full completion of thi• cw is required for entry into the drowing. WiMer w;u be &wudcd one· 10 drawer Husky Tool Chest .. - 10 dra,..tr Husky Rolltr Cabintl and 11S piec• Husky Tool .. t (Valued at o•tr S600l WiMcn wiJI be selected from en Dies received during the 4 c~end.a.r quuters ending MiUCh J I. June JO. September )0 llld December) I. All cnaies for each drawing mu.sc be ~e ivcd no later tJu.n lhc I~' day of lhc quaner. Summ•ry of Rul<5 ,.~ .. ,.._.,~~,......,.._..~.,..~---.arr. -...,li'GIIdltoJ,.....,...,..._~ ""'*"~ foam" _.bit.._....,a.._.oe,....,.,.._,.~TOOIIL 1l04~0.. ~ (.,... .... 710ot.O,_.._.,__.....,.... ...,'*c--\~-..,....,.,ON,_,....,.,OIII~b..n~~""'~... __ .OIJwCIO*'I•,....,. .... u.s...tt,-.• •ll'lldoldlr,.,.....,..,... .... ~ ~~,....__.,..f....... The..._o.-,o--,..,_ ..................... ,.. ...... -. ..... ........... ~ ...... .._.. • ...., ....................... ot' ... - --- ..... -.... ,_ ... , .,.......,.... __.._.. ... , (nall.cM .. ~ .......... ......__.-"'*'. .......... •="'-'-"" ,.,_..., ,.,.., I;!IOA f"•. IXIOI. A.-;.....,""ft-.-· ~ · JJ';'J'"JJ'J1''JuJ"1'JJ"J''IJ''J'J"'J'J'J"'IJ· oses-~zsL· lU sn1va N1 HON'tt19 A311'tA Lt9U S100.1 1'tNOISS;I~Ot1d A)ISOH n"O.l SY'T\Wd C:atom .&JftWJ .. ,..,. SS"ful-LSWW 11VW A1d3~ SS3NISna PRODUCT REGISTRATION CARD ',, '.

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t' THE STANLEY WORKS 823 807 Decision and Order DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violations of the Federal Trade Commission Act; and The respondent, its attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, and admission by the respondent. of all the jurisdictional facts set forth in the draft complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission's Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty ( 60) days, and having duly considered the comments received from interested persons pursuant to Section 2.34 of its Rules, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the follow.ingjurisdictional findings, and enters the following order:

1. Respondent The Stanley Works is_a Connecticut corporation with its principal office or place of business at 1000 Stanley Drive, New Britain, Connecticut.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

- - --- -- - -- Decision and Order 127 F.T.C. ORDER I.

It is ordered, That respondent, The Stanley Works, a corporation, its successors and assigns, and its officers, agents, representatives, and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, marking, labeling, packaging, advertising, promotion, offering for sale, sale, or distribution of any mechanics tool in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. 44, shall not misrepresent, in any manner, directly or by implication, the extent to which any such mechanics tool is made in the United States. For purposes of this order, mechanics tools means professional grade hand tools (other than carpentry tools) used by consumers or professionals in the assembly, repair, or maintenance of machinery or vehicles, or for other purposes. Such tools include, but are not limited to, wrenches, ratchets, sockets, and chisels.

Provided, however, that a representation that any mechanics tool is made in the United States will not be in violation of this order so long as all, or virtually all, of the component parts of the mechanics tool are made in the United States and all, or virtually all, of the labor in manufacturing the mechanics tool is performed in the United States.

Provided, further, that this order shall not apply to the marking of mechanics tools or components of mechanics tools forged, machined, or cast before the date that the complaint and order became final. II.

It is further ordered, That respondent The Stanley Works and its successors and assigns, shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All labeling, packaging, advertisements and promotional materials containing the representation;

B. All materials that were relied upon in disseminating the representation; and -~· '\ ~ ....

THE STANLEY WORKS 825 . i' 807 Decision and Order C. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations. III.

It is further ordered, That respondent The Stanley Works, and its successors and assigns, shall deliver a copy of this order to all current ang future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondent shall deliver this order to current personnel within thirty (30) days after the date of service ofthis order, and to future personnel within thirty_(30) days after the person assumes such position or responsibilities. IV.

It is further ordered, That respondent The Stanley Works, and its successors and assigns, shall notify the Commission at least thirty (30) days prior to any change in the corporation that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation oi dissolution of a subsidiary, p~rent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondent learns less than thirty (30) days prior to the date such action is to take place, respondent shall notify I ' the Commission as soon as is practicable after obtaining such ·knowledge. All notices required by this Part shall be sent by certified ..·;~ mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. V.

It is further ordered, That respondent The Stanley Works, and its i 'I I I successors and assigns, shall, within sixty (60) days after the date of .. i ,, ___________ __ _________ Decision and Order 127 F.T.C. service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order.

VI.

This order will terminate on June 2, 2019, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of this order if such complaint is filed after the order has terminated pursuant to this Part. Provided, further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.